Renting User Information: Hooked on Phonics and Amazon

Hooked on Phonics just agreed to forfeit $4,600 it earned from renting customer information that it had obtained under a Privacy Policy that did not allow it to rent customer information without giving existing customers a chance to opt out.

Interesting timing on this. I have been ordering books from Amazon for several years now under the name “Paul Amazon Allen.” I did this, of course, to track Amazon’s use of my customer information.

Yesterday, for the first time ever, I received a direct mail piece from a consumer electronics company addressed to “Paul Amazon Allen.” I haven’t read the Amazon privacy policy, and I’m guessing that they are covered and have the ability to rent my physical mailing address to whomever they want. With all the data about my past purchases, they can make a small fortune renting targeted mailing lists to non-competiting merchants. I’ll have to see if their latest SEC filings talk about mailing list rental income. This could be a very lucrative business for Amazon.

I like companies that find new revenue streams from existing assets. I was impressed when